Thread: Archive News - Iraqi Dinar Think Tank - 24/01/201 - 23/07/2011

Trade Bank of Iraq “Operating Normally”

According to a report from Reuters, the new president of the Trade Bank of Iraq said on Monday that the bank is operating normally and expansion plans are moving ahead, its new president said on Monday to allay fears of correspondent banks after its former chief fled amid allegations of financial irregularities.

To allay fears of correspondent banks after its former chief fled amid allegations of financial irregularities, Hamdiya al-Jaf, who was recently appointed chairwoman and president of the state-run bank, said TBI is operating independently and without political interference.

“At the beginning there was a fear among the correspondent international banks, or question marks for a short period, but … we have proved to the world that the TBI has not changed concerning its work and its banking activities,” Jaf told Reuters in an interview.

Former TBI president Hussein al-Uzri fled Iraq in early June after Prime Minister Nuri al-Maliki ordered a judicial inquiry into the bank when a committee that including officials from the anti-corruption commission and audit authority reported financial violations.

In a Reuters interview, Uzri said the allegations were fabricated and called himself a victim of a power grab by people close to Maliki.

While the bank is overseen by Iraq’s cabinet, by law, Jaf said, it operates independently and is monitored by the Central Bank of Iraq and the Bureau of Supreme Audit like any other Iraqi bank.

“No political entity has any effect on the bank,” Jaf said in her office in Baghdad’s west-central Mansour district.

She said the investigation of alleged financial violations had not been completed.

Set up in 2003 after the U.S.-led invasion that toppled Saddam Hussein, TBI has developed into one of Iraq’s largest and most profitable financial institutions, involved in financing purchases for the food ration programme and securing private sector financing for power and other reconstruction projects.

Large U.S. financial institutions like JPMorgan Chase and Citibank are among its correspondent banks.

TBI has 14 branches across Iraq and aims to add four more to cover all of Iraq’s 18 provinces, as well as Islamic banking services in four provinces, Jaf said.

It has received approval to open its first foreign branch in Beirut, she said, to be followed by a branch in Turkey.

Net profit this year is expected to increase by more than 18 percent over last year, she said. In May, the bank reported an 18 percent increase in 2010 profits to $361 million.
Jaf also expected the value of deposits to increase from $13 billion in 2010, but did not cite an exact figure.

The government said last year it was looking for bidders to build 1 million housing units, valued at an average of $50,000 each, for a total value of $50 billion. TBI intends to help finance that project, Jaf said.

“We will take part in the financing. It will bring benefits to Iraq in developing its construction infrastructure. In addition there will be financial revenues to the bank as a result,” she said.

http://www.iraq-businessnews.com/201...ng-normally/2/

Political Shadow Remains Over Key Bank

The following articler was published in the latest edition of Inside Iraqi Politics,

Prime Minister Nuri al-Maliki’s dramatic in persona raid of the Trade Bank of Iraq on June 2 and the flight abroad of its director remains unresolved. While raising wide attention in political circles as TBI became a set piece in a fight between Maliki and Ahmad Chalabi, the abrupt change of management in the country’s premier financial institution also raises questions about broader issues of corruption and transparency.

On June 2, Iraqi security raided Iraq’s preeminent bank in what the government alleged was a move against corruption. Corruption is ubiquitous in Iraq, but what made the raid unusual is that Maliki carried it out in person. TBI’s director, Hussein al-Uzri, quickly fled to Lebanon. While basic facts and Uzri’s countercharges against Maliki have been reported in international media, most fail to mention the possible link between Maliki’s raid and his fight with Uzri’s famous uncle, Ahmad Chalabi.

IIP No. 16 introduced the Uzri-TBI scandal and Uzri’s flight in the context of Maliki’s most recent attack in a months-long rift with Chalabi – Maliki’s Shia rivals had put forward Chalabi as a candidate for interior minister, but only as a spoiler. Then Chalabi moved to grab headlines by organizing a “relief ship” for Bahraini Shia – whose cause Maliki had himself championed – and Maliki blocked it on June 3 – just one day after the TBI raid. Then on June 8, Maliki issued an order removing Chalabi as head of the debaathification commission, a move he probably lacks the authority to make, but which is unlikely to face legal challenge all the same.

Chalabi responded vociferously, alleging that Maliki was ignoring other corruption cases and had a political vendetta, while Maliki allies – including his Chief-of-Staff Ali Allaq – have publicly alleged massive theft by Uzri. Since then additional facts have come to light, or least been alleged. According to Uzri, Maliki came to the bank at first like it was a business meeting to ask for $6 billion in financing for deals he had signed with a Korean company to build power generators. Only when Uzri demanded a government guarantee did Maliki begin making allegations. Maliki demanded a meeting with the full management, but seeing the heavy security presence, Uzri decided to slip away, although he wouldn’t say how he got out of the country.

Additionally, according to reports published on a number of Iraqi newsites, Uzri hid for two days in Baghdad before traveling to Irbil and from there to Beirut, where his wife and children have been living. In this regard remember Chalabi’s long relationship with Kurdish leadership going back into the 1990s. In addition to loans for the Korean projects, al-Jeeran claims sources say that Maliki also demanded commercial contracts for some of his allies. The same also quoted government sources as saying that while they were aware of Uzri’s “political relationship” with Chalabi, they were unaware the two were related. If this is an accurate representation, the claim is not credible.

http://www.iraq-businessnews.com/201...over-key-bank/

Investment in Iraq set to double this year

Iraq attracted US$45 billion in new investment so far this year, more than the total for the whole of last year, according to a report by Dunia Frontier Consultants reported by USA Today

The spike in investment is down to improved confidence in Iraq's stability, analysts say. Last year Iraq secured $42bn in investment.

Much of the investment is from companies within the Middle-East, but substantial investment from other parts of the world has been flowing in too. French companies account for 9.9 per cent of all investment in Iraq. The U.S. - despite leading the 2003 invasion - only accounts for 4.7 per cent.

U.S. business interest is growing though. Iraq's commercial attaché office in Washington received 2,251 applications to do business in Iraq in the first half of this year, compared with 1,369 in the same period last year.

South Korea was the largest foreign investor this year, representing 24% of the foreign money flowing into Iraq, according to the report. China also plays a significant role, with a Chinese oil company this month opening the first major oil field in Iraq in 20 years.

Decades of war and sanctions have left Iraq's economy and infrastructure in tatters. But, it is increasingly seen as an untapped market for foreign investors keen to get in on the action early and secure heavy profits despite the obvious risks.

The need for development in Iraq is great. It's electrical grid in desperate need of modernization, there are major housing shortages and infrastructure such as transport needs major improvement. Foreign investment is seen as key by some in the alleviation of these problems, while others warn of companies coming into Iraq, making massive profits and doing little to improve the lot of ordinary Iraqis.

http://www.zawya.com/story.cfm/sidZA...uble_this_year

Foreign investment begins to pour into Iraq
WASHINGTON — Foreign investment is beginning to pour into Iraq this year, fueled by a growing confidence in the country's stability.

The amount of new foreign investment deals is on track to double this year, according to a report by Dunia Frontier Consultants, which specializes in emerging markets. In the first half of this year, Iraq attracted $45.6 billion in foreign investment, about $3 billion more than all of last year, the report says.

The rush of investment this year reflects a new confidence in Iraq's stability and a reduction in risk, analysts say. "This is money talking," said Campbell Harvey, professor of finance at Duke University in North Carolina. U.S. companies have been slow to get in on the investment opportunities in Iraq, even lagging behind countries that opposed the war, such as France. Last year, French companies represented 9.9% of the foreign investment in Iraq, compared with 4.7% for American companies, the Dunia report says.

"U.S. companies tend to be more risk-averse than their European counterparts and certainly their regional counterparts," said Nicholas Skibiak, emerging markets director at Dunia.

The U.S. Chamber of Commerce has been urging American companies to consider investments in Iraq and pushing the U.S. government to more aggressively represent the interests of American businesses in the country.

"We have invested a lot in Iraq over the last decade in blood and treasure, and it is really unfortunate if we permit our trading partners to sort of capitalize on that investment to our disadvantage," said Lionel Johnson, vice president of Middle East affairs at the U.S. Chamber of Commerce.

Skibiak said "there is an 'almost perverse irony' in that the United States was accused by war critics of going to war to exploit Iraq's oil and other resources and "yet as a country we have very little to show for it."

This year, U.S. companies have shown more of an appetite for investing in Iraq. In the first six months of this year, U.S. companies represented 6.4% of the foreign investment in Iraq.

'Re-evaluate the Iraqi market'
U.S. business interest is growing. Iraq's commercial attaché office in Washington received 2,251 applications to do business in Iraq in the first half of this year, compared with 1,369 in the same period last year. Still, Naufel Alhassen, Iraq's commercial counselor in the U.S., said public perception of Iraq remain out of date.

"American business needs to re-evaluate the Iraqi market with a vision of 2011 — not with eyes of 2006 and 2007," he said.

He said Iraq's market is growing fast and that U.S. businesses risk missing opportunities. "If you keep waiting you are going to miss it," Alhassan said.

South Korea was the largest foreign investor this year, representing 24% of the foreign money flowing into Iraq, according to the report. Businesses in the rest of the world seemed poised to exploit the market's growth. Foreign investors' confidence grew and foreign dollars flowed in after Iraq's political landscape stabilized. Following months of political fighting after national elections last March, Iraqi political leaders agreed on a government in December. Nouri al-Maliki remained as prime minister and Oil Minister Hussain al-Shahristani was kept in the government as deputy prime minister for energy. Investors saw the continuity as a positive sign. "A lot of people through 2010 were sitting on sidelines watching the national elections," Skibiak said.

This year they came off the sidelines.

Many needs and much money
After decades of war and sanctions, Iraq's needs are great, and it has money to spend. Iraq ranks fourth in the world in proven oil reserves, and the rising price of oil has buoyed its cash reserves. Iraq has been issuing contracts to develop its oil fields and has sought help to rebuild its decrepit electrical grid in an effort to keep up with skyrocketing demand as people buy TVs, air conditioners and other appliances.

Iraq is also facing a housing shortage. Last year, Iraq announced it was awarding a contract of $11.28 billion to a Turkish consortium to help rebuild Sadr City, a sprawling Shiite slum in Baghdad, according to the Dunia report.

The contract calls for building 75,000 homes, in addition to schools and mosques in a slum where sewage puddles in the streets and families are crammed in aging buildings. Analysts caution that Iraq remains a risky place to invest. Corruption remains a problem, and there is always the risk of renewed violence and political instability. "The level of risk is still high," Harvey said.

http://www.usatoday.com/money/world/...business_n.htm

Mott MacDonald sees Great Opportunities in Iraq

Mott MacDonald’s director of oil, gas and petrochemicals, Azfar Shaukat, told attendees at the Iraq Petroleum Conference of great potential in the oil and gas sector, but warned companies they will have to be patient until significant investment is found.

The event, held at the Landmark Hotel in London, UK, focused on the next phase of developing Iraq’s oil and gas resources as well as the current and future upstream opportunities. It was attended by international oil and gas companies from 70 countries together with key Iraqi oil and gas industry experts.

In his presentation Azfar told delegates that at present Iraq is losing, through flaring, in excess of 10 billion cubic metres (bcm) of associated gas a year. This is gas produced as part of oil production that has historically not been captured. In addition the gas infrastructure in the country is inadequate for the planned volumes and will need significant investment to upgrade.

“The primary focus for Iraq is to improve the reliability and availability of electricity to its population, and since this is planned to be gas-fired, most of the associated gas will be consumed by new power stations,” Azfar commented.

Mott MacDonald has been active in Iraq for more than 50 years and in the last six years has delivered over a 1000 projects in Iraq covering health, transport, power, and water. They are supporting major energy companies in the development of oil and gas fields which involves asset surveys and working with the state and international companies to come up with the right solutions to refurbish and upgrade oil and gas facilities in order to increase production.

Azfar said:

“With targeted oil production associated gas output could rise to 70bcm per year, equivalent to roughly three-quarters of UK annual consumption. However, although neighbouring countries and Europe are interested in gas from Iraq, the actual amount of gas available for export will be very limited over the next 5-10 years.”

http://www.iraq-businessnews.com/201...ities-in-iraq/

UN cautiously optimistic about Iraq

The UN special envoy to Iraq Ad Melkert expressed "cautious optimism" about economic and governmental improvements in Iraq in a briefing to the Security Council Tuesday.

"In most I have witnessed in Iraq, there is ground for cautious optimism, provided there is determined leadership within the country and strong cooperation in the region with Iraq," said UN envoy Ad Melkert.

"In departure from decades of authoritarian regime, negotiations between all parties have been now the predominant feature of life. Parliament is taking an increasingly important role in decision making”, he said.

Melkert concluded by insisting that Iraq's "sustainable engagement by the international community" is needed to help the country reach its "vast potential."

http://www.alsumaria.tv/en/Iraq-News...bout-Iraq.html

Can US Aims in Iraq Be Squared with Iraqi Sovereignty?

The following article was published by Reidar Visser, an historian of Iraq educated at the University of Oxford and currently based at the Norwegian Institute of International Affairs.

“American instructors!”

It has been long in the making but finally there are more specific signs that Prime Minister Nuri al-Maliki is beginning to publicly articulate a vision of a post-2011 US presence in Iraq that can fit with his own avowed aim to be an Iraqi nationalist.

Importantly, after his recent meeting with the new US defence secretary Leon Panetta, Maliki was talking about “instructors” or “trainers” (mudaribun) and not advisers (mustasharun), or, for that matter, regular troops. Historically speaking, “advisers” would be a major problem given the chequered legacy of the British in Iraq during the mandate and in subsequent decades, where it was precisely the popular hatred of the advisers (and the connotations of their immense political influence) that played a key role in unseating the monarchy in 1958. Similarly, regular forces or the presence of military bases would also be at obvious variance with a discourse of Iraqi nationalism.

The areas in which Maliki envisioned US training assistance included border surveillance, logistics and intelligence capabilities. This is actually a discourse that can fit in with a notion of Iraqi sovereignty: The US is considered an undisputed world leader in many of these areas; hence, to ask for assistance from a global superpower in these specific areas would not harm the idea of Iraqi independence in the same way that the “advisers” of the British mandate did.

Contrast this with the prevailing themes in the Western debate about Iraq. “Absence of external defence capabilities” is a recurrent term. And while this is probably true, as long as it is presented as a general issue rather than broken up into digestible and specific areas that can be singled out for cooperation with the US (preferably technology-related), kneejerk nationalist reactions are likely to prevail in the Iraqi parliament. Similarly, many Western commentators like to highlight a US peacekeeping role in and around Kirkuk. This is also something that is susceptible to Iraqi nationalist criticism, because it is a kind of narrative that fits so well with the standard conspiracy theory to the effect that foreigners are plotting to keep the Iraqis divided in order to justify their own continued military presence. If Arab-Kurdish tensions around Kirkuk are used as a key argument for extending a US presence in Iraq, each bomb that goes off elsewhere in the country may soon be blamed on a US scheme to pit Sunnis against Shiites so that they can extend the American presence in the oil-rich areas in the south.

The challenge for Washington is now to find out whether the parameters defined by Maliki – with an emphasis on “instructors” – can meet its own aims in a context where a straightforward SOFA renewal is becoming increasingly unlikely. Maliki seems to be aiming for a military presence that is so low-key that the anticipated parliamentary debate about the SOFA can simply be circumvented. For their part, the Iraqis still need to agree on a new minister of defence.

PS: Today’s vote in parliament to “support a reduction of the number of ministers in principle” is a non-issue. The real challenge is to actually do it and not least negotiate the constitutional modalities relating to such a move (i.e. the rules for dismissing a minister).

http://www.iraq-businessnews.com/201...i-sovereignty/

Iraq resort to taxes to tackle inflation

The Iraqi government announced Wednesday that it has developed a plan to activate the taxes in the country to contribute to the persistence of inflation in the Iraqi economy.

The Economic Adviser in the government peace Qureshi told the Kurdish news agency (Rn) that "the Iraqi government began to develop a map of action to activate the taxes simple addition to the formation of a room economic processes to reduce the high rents and preventing the dumping of the Iraqi market goods and goods".

And puts economists tax system in Iraq within the regulations of backward and which do not rise to the level of support the economy and tackle inflation in the country. The Ministry of Planning early this month for the low level of inflation is the basis for the month of June last by 0.8% from the previous month, and increased by 6.1% for the month of June 2010.

He Quraishi "These measures will support the direction the central bank to reduce the high annual inflation in the country, which began to climb it which affects the nature of the Iraqi economy."

He pointed out that "the government will work to control inflation and monthly so as not to affect the overall structure of the Iraqi economy."

http://www.aknews.com/ar/aknews/2/252769/

Reclassification of companies in the whole of Iraq including the Kurdistan region

Agreed the ministries of planning, the federal government and the Kurdistan region, a mechanism for re-classification of companies generality of Iraq including the Kurdistan region. reviewed the Chairman of the classification of companies at the Ministry of Planning province of Kurdistan and the Director General of Legal Affairs in the Ministry of Planning Government of Iraq, told a news conference, details to the media.

The Chairman of the Committee rated companies in the province, Ayoub Klaly, said, "and a senior delegation from the Iraqi government held during the past two days, a series of meetings with the Commission on classification of companies in the province, and we have to develop a mechanism to exchange information and increase cooperation between the two sides."

He noted that "It was decided to develop cooperation and dealing with the identity of the contractors of Kurdistan in all parts of Iraq and the identities of Iraqi contractors in the province of Kurdistan." He Klaly, "it was the formation of a joint committee from both sides, to work to unify the instructions both on the classification of companies."

For his part, Director General of Legal Affairs Iraqi Ministry of Planning, Saadia Mohammed, "The meetings last two days, was aimed at finding a joint mechanism between the federal and provincial government, in order to provide facilities to contractors so that contractors in other areas of Iraq to come to the Kurdistan region and work in it, and go Mqauloa region to other regions from Iraq."

Explained Mohammed that "there is a rupture between the contractors of the Kurdistan region and other provinces since 2009," pointing out that "the contractors that they had the assurances in the banks of the region, were not backed by the Iraqi government, but should have been to have financial support in Iraqi banks."

She said, "We have come to a conclusion, which is a classification of contractors throughout Iraq including the Kurdistan region, so that contractors can work in any part of Iraq."

http://www.aknews.com/ar/aknews/2/252874/

Despite the lack of readiness of Iraq .. Talabani confirms the departure of U.S. troops late this year

Said President Jalal Talabani that U.S. forces will withdraw from Iraq on schedule later this year, despite receiving reports of security and military refers to lack of readiness of security forces to protect the country.

Talabani lied in an interview with China Central Television, some media reports on the compatibility of the House of Representatives to keep the 20 thousand soldiers in the country, after the end of this year, saying, "This news is not true."

Talabani said "the Iraqi parliament has not yet studied the subject", he said, adding that "the parties of Iraq and America insist on the security agreement, which define relations political, commercial, cultural and technological."

continued the President, "The extension of the agreement is not possible, because it needs approval by two thirds of Parliament, and this can not get it."

http://www.radiodijla.com/cgi-bin/ne...-21%2008:02:49